STRATOS INTERNATIONAL INC. RESTRICTED STOCK AWARD AGREEMENT
Exhibit 99.3
This agreement dated as of March 9, 2005 (the “Award Agreement”), is entered into by and
between Stratos International Inc., a Delaware corporation (the “Company”), and Xxxxxx X. Xxxxxx
(the “Grantee”). All capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them by the Stratos Lightwave, Inc. 2003 Stock Plan (the “Plan”).
(a) | None of the Restricted Shares may be sold, transferred, pledged, hypothecated or otherwise encumbered or disposed of until they have vested in accordance with Section 6 of this Award Agreement. | ||
(b) | Any Restricted Shares that are not vested shall be forfeited to the Company immediately upon termination of the Grantee’s employment with the Company and all of its Subsidiaries and Affiliates and Grantee’s service on the Stratos Board of Directors (the “Board”). |
(a) | Up to fifty percent (50%) of the Restricted Shares shall become vested prior to the fifth anniversary of the Award Date based on the extent to which the Company’s Revenue for a fiscal year (commencing with the fiscal year ending April 30, 2006) exceeds the Company’s Revenue for the immediately preceding fiscal year. If the Grantee continues to be employed by the Company (or a Subsidiary or Affiliate thereof) or serve on the Board through the last day of a fiscal year (commencing with the fiscal year ending April 30, 2006) and the Revenue reported by the Company for such fiscal year exceeds the Company’s Revenue for the immediately preceding fiscal year, then the Restricted Shares shall thereupon become immediately vested pursuant to the following schedule: |
Fiscal Year Revenue as a | ||
Percentage of Previous Fiscal | Percentage of Restricted Shares | |
Year Revenue | Subject to Accelerated Vesting | |
109.9% or less |
0% | |
110% |
10% | |
120% |
20% | |
130% |
30% | |
140% |
40% | |
150% or more |
50% |
If the actual Revenue for a fiscal year is at least 110% and less than 150% of the
Company’s Revenue for the previous fiscal year and is not set forth above, the
percentage of Restricted Shares subject to accelerated vesting shall be determined
by interpolating the percentages set forth above on a straight line basis. For
purposes of the Plan, the Company’s “Revenue” shall mean the Company’s gross revenue
as determined by the Committee and set forth in the audited consolidated financial
statements of the Company, prepared in accordance with generally accepted accounting
principles (“GAAP”). The Committee, in its sole discretion, may adjust the Revenue
targets set forth herein to take into account any unusual or nonrecurring events
affecting the Company or any Subsidiary or Affiliate or the financial statements of
the Company or any Subsidiary or Affiliate, including
without limitation any acquisitions or dispositions, and any changes in applicable
laws, regulations or accounting principles.
(b) | Up to fifty percent (50%) of the Restricted Shares shall become vested prior to the fifth anniversary of the Award Date based on the extent to which Net Income target levels set forth below are achieved after the Company’s 2005 fiscal year. If the Grantee continues to be employed by the Company (or a Subsidiary or Affiliate thereof) or serve on the Board through the last day of a fiscal year (commencing with the fiscal year ended April 30, 2006) and the Net Income reported by the Company for such fiscal year exceeds the target levels set forth below, then Restricted Shares shall thereupon become immediately vested pursuant to the following schedule: |
Fiscal Year | Percentage of Restricted Shares | |
Net Income | Subject to Accelerated Vesting | |
$2.99 million |
0% | |
$3 million |
10% | |
$5 million |
20% | |
$7 million |
30% | |
$9 million |
40% | |
$11 million or more |
50% |
If the actual Net Income for a fiscal year is at least $3 million and is less than $11 million and is not set forth above, the percentage of Restricted Shares subject to accelerated vesting shall be determined by interpolating the percentages set forth above on a straight line basis. For purposes of this Agreement, “Net Income” shall mean the Company’s net income as determined by the Committee and set forth in the audited financial statements of the Company, prepared in accordance with GAAP. The Committee, in its sole discretion, may adjust the Net Income targets set forth herein to take into account any unusual or nonrecurring events affecting the Company or any Subsidiary or Affiliate or the financial statements of the Company or any Subsidiary or Affiliate, including without limitation any acquisitions or dispositions, and any changes in applicable laws, regulations or accounting principles. | |||
(c) | All Restricted Shares shall become immediately vested upon a Change of Control, as defined in the Plan. | ||
(d) | All Restricted Shares shall become immediately vested (i) if the Grantee’s employment with the Company and all of its Subsidiaries and Affiliates is terminated due to: (A) retirement on or after Grantee’s fifty-fifth birthday with the consent of the Company; (B) retirement at any age on account of total and permanent disability as determined by the Company; or (C) death, or (ii) if the Grantee’s service on the Board shall terminate for any reason other than (A) voluntary resignation other than due to the Grantee’s total and permanent disability as determined by the Committee or (B) removal for Cause. |
8. Applicable Law. The validity, construction, interpretation and enforceability of
this Award Agreement shall be determined and governed by the laws of the State of Illinois without
regard to any conflicts or choice of law rules or principles that might otherwise refer
construction or interpretation of this Award Agreement to the substantive law of another
jurisdiction, and any litigation arising out of this Award Agreement shall be brought in the
Circuit Court of the State of Illinois or the United States District Court of the Eastern Division
of the Northern District of Illinois and the Grantee consents to the jurisdiction and venue of
those courts.
or continued service on the Board, or interfere with the right of the Company or its
Subsidiaries or Affiliates to terminate at any time the employment of the Grantee or the
continuation of the Grantee’s service on the Board.
(a) | the vesting of the Restricted Shares shall not accelerate pursuant to the terms of any Severance Plan on account of any change of control that is deemed to have occurred prior to the Award Date, including the merger of Sleeping Bear Merger Corp., a Delaware corporation and direct wholly owned subsidiary of the Company, into Sterling Holding Company, a Delaware corporation, or any termination of the Grantee’s employment following such change of control; and | ||
(b) | as of the Award Date, no event has occurred and no circumstances exist that would entitle the Grantee to terminate employment with the Company (or any Subsidiary or Affiliate) for “Good Reason,” within the meaning of any Severance Plan, following any change of control that is deemed to have occurred prior to the Award Date pursuant to the terms of such Severance Plan. |
GRANTEE | Stratos International, Inc. | |||||
By: | ||||||
Its: | ||||||